Key insights
- Bernstein highlights improving crypto market fundamentals driven by institutional inflows, long-term holders, and blockchain integration. Bitcoin ETFs are seeing inflows, and companies like Morgan Stanley and Charles Schwab are expanding crypto offerings. Increased stablecoin adoption and real-world asset tokenization are also noted as positive drivers. This may signal increased risk appetite and liquidity, potentially benefiting US equities.
Investing.com -- Bernstein’s senior digital analyst Gautam Chhugani says he sees "asymmetric upside" returning to cryptocurrency markets, driven by stronger institutional inflows, resilient long-term holders, and the rapid integration of blockchain infrastructure into mainstream finance.
Bitcoin is steadily approaching the $80,000 mark after finding a clear trough at $60,000. Chhugani said the combination of Strategy’s treasury model and spot Bitcoin ETFs has fundamentally transformed Bitcoin’s ownership structure, with holders inactive for more than one year now accounting for 60% of total supply.
“This ownership structure is unique to Bitcoin signifying long term ‘believers’ who remain insensitive to Bitcoin volatility holding Bitcoin as a ‘store of value’,” Chhugani wrote.
Institutional on-ramps, meanwhile, continue to expand. Morgan Stanley earlier this month launched its proprietary spot Bitcoin ETF, MSBT (NYSE:MSBT), recording $31 million in first-day inflows and growing to approximately $190 million in assets under management.
Charles Schwab has also begun rolling out direct spot crypto trading for Bitcoin and Ethereum through its Schwab Crypto platform.
Overall, spot Bitcoin ETFs have recorded net inflows of $2.7 billion over the past three weeks and now hold roughly 6.3% of total Bitcoin supply, Bernstein noted.
Strategy, the largest corporate Bitcoin holder with 815,061 BTC valued at approximately $63 billion, has continued accumulating through the downturn, adding 142,561 BTC year-to-date at an average cost of around $78,000.
The firm’s STRC preferred stock product, which pays an 11.5% monthly dividend, has seen sharply rising trading volumes, reaching $7.2 billion in April month-to-date versus $5.7 billion in March.
Beyond Bitcoin, Chhugani also flagged stablecoin adoption and real-world asset tokenization as structural tailwinds decoupled from crypto market sentiment. Dollar-backed stablecoin supply stands at $276 billion, an all-time high, with USDC alone reaching $78 billion despite Bitcoin being down 40% from its peak.
Total tokenized real-world assets on blockchain now stand at approximately $345 billion, with private credit and U.S. Treasuries making up the bulk of non-stablecoin tokenized assets, growing around 110% year-over-year.
Chuggani also addressed the much-debated quantum computing risks, which have gained attention following recent breakthroughs. The analyst argues the threat is "real but manageable," adding that he expects "adequate time (3-5 years) for protocols to evolve" before cryptographically relevant quantum computers could pose a genuine challenge to Bitcoin’s security.
"We believe the best days of crypto are ahead, which will reflect in higher and structurally longer crypto bull cycle,” the analyst said.